LOMA 281 Module 1||
75 QUESTIONS||
CORRECT ANSWERS||
VERIFIED
Risk - ANSWER the possibility of an unexpected result.
Premium - ANSWER A specified amount of money an insurer charges in exchange for its agreement to
pay a policy benefit when a specific loss occurs.
Insurance company - ANSWER A company that provides protection against the risk of financial loss
caused by specific events.
Life insurance - ANSWER A type of insurance under which the insurer promises to pay a death benefit
upon the death of a named person.
Annuity - ANSWER A financial product by which an insurer, in return for receiving a premium, promises
to make periodic payments to a named person or entity.
Applicant - ANSWER The person or entity that applies for an insurance policy.
Policyowner - ANSWER The person or entity that owns the issued policy.
, Insured - ANSWER The person whose life or health the policy insures.
Beneficiary - ANSWER The person named to receive the policy benefit if the insured event occurs.
Third party policy - ANSWER A policy one person purchases that insures the life of another person.
Speculative risks - ANSWER A risk that involves three possible outcomes: loss, gain, or no change.
Pure risk - ANSWER A risk that involves no possibility of gain; either a loss occurs or no loss occurs.
Contracts of indemnity - ANSWER Health insurance; An insurance policy under which the amount of the
policy benefit payable for a covered loss is based on the actual amount of financial loss that results from
the loss, as determined at the time of the loss.
Moral hazard - ANSWER A characteristic that exists when the reputation, financial position, or criminal
record of an applicant for insurance or a proposed insured indicates that the person may act dishonestly
in the insurance transaction.
Antiselection - ANSWER AKA adverse selection; The tendency of individuals who believe they have a
greater-than-average likelihood of loss to seek insurance protection to a greater extent than those who
believe they have an average or less-than-average likelihood of loss.
Risk class - ANSWER A grouping of insureds who represent a similar level of risk to an insurer.
Insurable interest - ANSWER The interest that an insurance policyowner has in the risk that is insured. A
policyowner has an insurable interest if she is likely to suffer a genuine loss or detriment should the
event insured against occur.
Financial services industry - ANSWER The industry made up of various kinds of financial institutions that
help people, businesses, and governments save, borrow, invest, and otherwise manage money.
75 QUESTIONS||
CORRECT ANSWERS||
VERIFIED
Risk - ANSWER the possibility of an unexpected result.
Premium - ANSWER A specified amount of money an insurer charges in exchange for its agreement to
pay a policy benefit when a specific loss occurs.
Insurance company - ANSWER A company that provides protection against the risk of financial loss
caused by specific events.
Life insurance - ANSWER A type of insurance under which the insurer promises to pay a death benefit
upon the death of a named person.
Annuity - ANSWER A financial product by which an insurer, in return for receiving a premium, promises
to make periodic payments to a named person or entity.
Applicant - ANSWER The person or entity that applies for an insurance policy.
Policyowner - ANSWER The person or entity that owns the issued policy.
, Insured - ANSWER The person whose life or health the policy insures.
Beneficiary - ANSWER The person named to receive the policy benefit if the insured event occurs.
Third party policy - ANSWER A policy one person purchases that insures the life of another person.
Speculative risks - ANSWER A risk that involves three possible outcomes: loss, gain, or no change.
Pure risk - ANSWER A risk that involves no possibility of gain; either a loss occurs or no loss occurs.
Contracts of indemnity - ANSWER Health insurance; An insurance policy under which the amount of the
policy benefit payable for a covered loss is based on the actual amount of financial loss that results from
the loss, as determined at the time of the loss.
Moral hazard - ANSWER A characteristic that exists when the reputation, financial position, or criminal
record of an applicant for insurance or a proposed insured indicates that the person may act dishonestly
in the insurance transaction.
Antiselection - ANSWER AKA adverse selection; The tendency of individuals who believe they have a
greater-than-average likelihood of loss to seek insurance protection to a greater extent than those who
believe they have an average or less-than-average likelihood of loss.
Risk class - ANSWER A grouping of insureds who represent a similar level of risk to an insurer.
Insurable interest - ANSWER The interest that an insurance policyowner has in the risk that is insured. A
policyowner has an insurable interest if she is likely to suffer a genuine loss or detriment should the
event insured against occur.
Financial services industry - ANSWER The industry made up of various kinds of financial institutions that
help people, businesses, and governments save, borrow, invest, and otherwise manage money.
